|August 15th, 2009||#61|
Join Date: Oct 2005
Petroleum is the world's largest industry in terms of dollar value. With that kind of money involved, lots of people have a lot of incentive, billions and billions of incentives, to spin the argument one way or the other. The kind of power that can be had from control of oil production, distribution, and sales is astonishing. It's the kind of power that the tyrants of antiquity could not even imagine. I'm sure the most of the people directly employed in the oil industry are in the dark as to the true quantity of recoverable oil reserves. So what hope does the layman have of coming to the truth of the matter? Through careful consideration of arguments both pro and con, and by avoiding the lure of falling into the conspiracy theory trap, one can piece together something that is pretty close to the truth.
First, lets dispense with some of the conspiracy theory nonsense. The biggest crackpot theory is that oil supplies are unlimited, that oil is produced deep in the earth's core by heat generated by some type of radioactive furnace. This idea is patently idiotic, since the simple fact is that nothing on this planet is limitless. Even if oil were a product of radioactive heating, fission reactions don't continue forever. Eventually the nuclear fuel would be depleted.
Oil is not a fossil fuel, but has a abiogenic origin. This argument is moot. Let's assume that it is true, and that most petroleum is abiogenic. As I've stated above, nothing on this planet is limitless, including oil. What difference does it make if oil is abiogenic or not?
The only valid questions are:
So, how much oil is still in the ground on this planet? The honest answer is that no one knows for sure. The Saudis claim reserves of X, but will not allow independent verification. The Russians ape the Saudis, they make claims, but will not allow independent verification. I'm guessing that their self reported reserve numbers are inflated, since there is a lot of incentive inflate the numbers.
How difficult will it be to extract the oil that's still in the ground. Since average oil prices are trending upward, it's my belief that the easy oil(cheap oil) is very nearly gone. That doesn't mean that oil production will stop. It will be possible to buy a gallon of gas a hundred years from now, however, very few people we be able to afford it.
No problem, we'll use technology to find substitutes for oil. Sorry, but in my house, we obey the laws of thermodynamics. The fact is that there is no other practical energy source available to us that provides anything like the energy density of a gallon of oil. Yes, we can use substitutes for oil. No, the world will not end when the cheap oil dries up. What will happen is that life on this planet, and especially in the USA, will be radically transformed. For starts, the American suburb is a dead end, a few first ring suburbs may survive, but the outer ring burbs will shrivel up and blow away. The way we produce our food and get it to market will also undergo a convulsive change.
Anyone who thinks it will be business as usual is in for a steel-toed boot of reality to the shorts.
Last edited by Fissile; August 15th, 2009 at 08:51 PM.
|August 15th, 2009||#62|
Join Date: Dec 2003
Well, Alex, any bets I would make would take a few years to settle one way or the other.
I think the "food apocalypse" is already here. Instead of starvation, we have obesity and diabetes. The food supply is poisonous.
OK, I'll make a bet. I bet the population in 2020 is less than it is now, which I think is 7 billion. How's that? That's a bet you want to lose.
|August 15th, 2009||#63|
|August 15th, 2009||#64|
Join Date: Dec 2003
Location: Under the Panopticon.
I found a site that show this in understandable numbers and lists.
List_of_countries_and_territories_by_fertility_rate" target="_blank"> List_of_countries_and_territories_by_fertility_rate
Every country under 2.1 on this list has a birth rate that will lead to a drop in population. Mexico has had one of the most dramatic drops in birth rate. It is now at 2.2, just barely replacement, but only 5 years ago was 2.4. I guess we will start running out of Mexicans some time ahead.
The birth rates of Iran and Tunisia are below replacement.
The birth rates of Turkey, Kuwait, Lebanon, United Arab Emirates, and Morocco are barely above replacement, and are dropping rapidly. Other Muslim countries have falling birth rates, as well.
Almost the only countries, Muslim, Christian, or otherwise, that are maintaining high birth rates are Sub-Saharan countries (That would be nigger countries.)
It looks like within the near future, the population of the Earth will begin to drop. I've not found any source that gives any predictions on when. I'll take Kievsky's bet if we can extent it to 2045. I'll be 100, and won't know if I've won or lost.
Late edit: The site with the list is kept current. I made essentially this same post some time ago, and since then, the birth rate of Mexico has dropped from 2.2 to 2.1. Mexico is now exactly at replacement. Look at the huge list of countries below 2.1. All of these countries are below replacement, some far below.
Hunter S. Thompson, "Big dark, coming soon"
Last edited by Mike in Denver; August 15th, 2009 at 10:17 PM.
|October 20th, 2009||#66|
Join Date: Jul 2009
Scientific proof by scientific researchers in Sweden of the existence of mass deposits of oil formed from abiotic origins has blown the 'peak oil' theory sky high.
|October 20th, 2009||#67|
Join Date: Jul 2009
Demographics are a result not a reason.
|October 20th, 2009||#68|
|October 20th, 2009||#69|
Rather than worrying your pretty little heads over stuff that is beyond your level, why not take the unthinking man's way and simply check the price at the pump? Price isn't just an exchange level, it conveys information about supply and demand. If oil truly is going to run out or become to expensive to produce, that will be surely be evident at the pump long before the last drop is drilled.
Belief in peak oil is not a whit different from believe in the return of Jesus. Rapture bunnies have the Bible, peakers have some dude's chart.
|October 21st, 2009||#71|
As for energy shortages, sure, it could happen. My opinion is it probably won't, and if it does, if we really are running out of oil, the fact will be indicated by pump prices, causing the market adjust accordingly. I see general collapse as result of our basic food-energy system as extremely unlikely. Now, collapse as result of insane politics and racial degeneration is a different matter...
|October 21st, 2009||#72|
|October 21st, 2009||#73|
Join Date: Dec 2003
Since I'm an obsessive peak-oil deus ex machina of doom-tard, I'll provide you with some commentary on Fuzzy's cited Swedish researches on abiotic oil.
The 'Abiotic Oil' Controversy
By Richard Heinberg
The debate over oil's origin has been going on since the 19th century. From the start, there were those who contended that oil is primordial - that it dates back to Earth's origin - or that it is made through an inorganic process, while others argued that it was produced from the decay of living organisms (primarily oceanic plankton) that proliferated millions of years ago during relatively brief periods of global warming and were buried under ocean sediment in fortuitous circumstances.
During the latter half of the 20th century, with advances in geophysics and geochemistry, the vast majority of scientists lined up on the side of the biotic theory. A small group of mostly Russian scientists - but including a tiny handful Western scientists, among them the late Cornell University physicist Thomas Gold - have held out for an abiotic (also called abiogenic or inorganic) theory. While some of the Russians appear to regard Gold as a plagiarist of their ideas, the latter's book The Deep Hot Biosphere (1998) stirred considerable controversy among the public on the questions of where oil comes from and how much of it there is. Gold argued that hydrocarbons existed at the time of the solar system's formation, and are known to be abundant on other planets (Jupiter, Saturn, Uranus, and some of their moons) where no life is presumed to have flourished in the past.
The abiotic theory holds that there must therefore be nearly limitless pools of liquid primordial hydrocarbons at great depths on Earth, pools that slowly replenish the reservoirs that conventional oil drillers tap.
Meanwhile, however, the oil companies have used the biotic theory as the practical basis for their successful exploration efforts over the past few decades. If there are in fact vast untapped deep pools of hydrocarbons refilling the reservoirs that oil producers drill into, it appears to make little difference to actual production, as tens of thousands of oil and gas fields around the world are observed to deplete, and refilling (which is indeed very rarely observed) is not occurring at a commercially significant scale or rate except in one minor and controversial instance discussed below.
The abiotic theorists also hold that conventional drillers, constrained by an incorrect theory, ignore many sites where deep, primordial pools of oil accumulate; if only they would drill in the right places, they would discover much more oil than they are finding now. However, the tests of this claim are so far inconclusive: the best-documented "abiotic" test well was a commercial failure.
Thus even if the abiotic theory does eventually prove to be partially or wholly scientifically valid (and that is a rather big "if"), it might have little or no practical consequence in terms of oil depletion and the imminent global oil production peak.
That is the situation in a nutshell, as I understand it, and it is probably as much information as most readers will need or want on this subject. However, as this summary contradicts some of the more ambitious claims of the abiotic theorists, it may be helpful to present in more detail some of the evidence and arguments on both sides of the debate.
Oil at the Core?
Gold is right: there are hydrocarbons on other planets, even in deep space. Why shouldn't we expect to find primordial hydrocarbons on Earth?
This is a question whose answer is only partly understood, and it is a complicated one. The planets known to have primordial hydrocarbons (mostly in the form of methane, the simplest hydrocarbon) lie in the further reaches of the solar system; there is little evidence of primordial hydrocarbons on the rocky inner planets (Mercury, Venus, Earth, and Mars). On the latter, possibly the hydrocarbons either volatized and escaped into space early in the history of the solar system, or - as Gold theorizes - they migrated to the inner depths. (Note: very recent evidence of methane in the atmosphere of Mars is being viewed as evidence of biological activity, probably in the distant past. (1)) There is indeed evidence for deep methane on Earth: it vents from the mid-oceanic ridges, presumably arising from the mantle, though the amount vented is relatively small - less than the amount emitted annually in cow farts (incidentally, there are persuasive biotic explanations for the origin of this vented methane).
A new study by the US Department of Energy and Lawrence Livermore Lab suggests that there may be huge methane deposits in Earth's mantle, 60 to 120 miles deep. (2) But today oil companies are capable of drilling only as deep as six miles, and this in sedimentary rock; in igneous and metamorphic rock, drill bits have so far penetrated only two miles. (3) In any attempt to drill to a depth remotely approaching the mantle, well casings would be thoroughly crushed and melted by the pressures and temperatures encountered along the way. Moreover, the DOE study attributes the methane deposits it hypothesizes to an origin different from the one Gold described.
More to the point, Gold also claimed the existence of liquid hydrocarbons - oil - at great depths. But there is a problem with this: the temperatures at depths below about 15,000 feet are high enough (above 275 degrees F) to break hydrocarbon bonds. What remains after these molecular bonds are severed is methane, whose molecule contains only a single carbon atom. For petroleum geologists this is not just a matter of theory, but of repeated and sometimes costly experience: they speak of an oil "window" that exists from roughly 7,500 feet to 15,000 feet, within which temperatures are appropriate for oil formation; look far outside the window, and you will most likely come up with a dry hole or, at best, natural gas only. The rare exceptions serve to prove the rule: they are invariably associated with strata that are rapidly (in geological terms) migrating upward or downward. (4)
The conventional theory of petroleum formation connects oil with the process of sedimentation. And, indeed, nearly all of the oil that has been discovered over the past century-and-a-half is associated with sedimentary rocks. On the other hand, it isnít difficult to find rocks that once existed at great depths where, according the theories of Gold and the Russians, conditions should have been perfect for abiotic oil formation or the accumulation of primordial petroleum - but such rocks typically contain no traces of hydrocarbons. In the very rare instances where small amounts of hydrocarbons are seen in igneous or metamorphic rocks, the latter are invariably found near hydrocarbon-bearing sedimentary rocks, and the hydrocarbons in both types of rock contain identical biomarkers (more on that subject below); the simplest explanation in those cases is that the hydrocarbons migrated from the sedimentary rocks to the igneous-metamorphic rocks.
Years ago Thomas Gold recognized that the best test of the abiotic theory would be to drill into the crystalline basement rock underlying later sedimentary accumulations to see if there is indeed oil there. He persuaded the government of Sweden in 1988 to drill 4.5 miles down into granite that had been fractured by a meteorite strike (the fracturing is what permitted drillers to go so deep). The borehole, which cost millions to drill, yielded 80 barrels of oil. Even though the project (briefly re-started in 1991) was a commercial failure, Gold maintained that his ideas had been vindicated. Most geologists remained skeptical, however, suggesting that the recovered oil likely came from drilling mud.
The Russians (I must remind the reader that I am actually talking about a minority even with the community of Russian geologists) claim successes in drilling in basement rock in the Dneiper-Donets Basin in the Ukraine. Professor Vladilen A. Krayushkin, Chairman of the Department of Petroleum Exploration, Institute of Geological Sciences, Ukrainian Academy of Sciences, Kiev, and leader of the exploration project, wrote:
The eleven major and one giant oil and gas fields here described have been discovered in a region which had, forty years ago, been condemned as possessing no potential for petroleum production. The exploration for these fields was conducted entirely according to the perspective of the modern Russian-Ukrainian theory of abyssal, abiotic petroleum origins. The drilling which resulted in these discoveries was extended purposely deep into the crystalline basement rock, and it is in that basement where the greatest part of the reserves exist. These reserves amount to at least 8,200 M metric tons [65 billion barrels] of recoverable oil and 100 B cubic meters of recoverable gas, and are thereby comparable to those of the North Slope of Alaska. (5)
However, independent assessments of the situation do not support these claims. First, the US Geological Survey does not agree that the Dneiper-Donets reserves are that large (it cites 2.7 billion barrels for total oil endowment). Second, the appearance of oil in basement rocks is unusual but not unheard of, and there are various ways in which oil can appear in basement rock. In the process of drilling through overlying sedimentary rock, oil can be expelled downward so that it appears to come from below. Then there are situations where igneous or metamorphic rocks have migrated upward, or sedimentary rocks have migrated downward, so that basement rock covers sedimentary rock (in some cases, the overthrust may be hundreds of square kilometers in extent). In his paper "Oil Production from Basement ReservoirsóExamples from USA and Venezuela," Tako Koning of Texaco Angola, Inc., cites source rocks such as marine shales in nearly all instances. (6) More to the point, numerous studies cite the existence of sedimentary source rocks in the Dneiper-Donets region. (7)
Abiotic theorists often point out evidence of fields refilling. The most-cited example is Eugene Island, the tip of a mostly submerged mountain that lies approximately 80 miles off of the coast of Louisiana. Here is the story as related by Chris Bennett in his article "Sustainable Oil?" on WorldNetDaily.com:
A significant reservoir of crude oil was discovered nearby in the late '60s, and by 1970, a platform named Eugene 330 was busily producing about 15,000 barrels a day of high-quality crude oil. By the late '80s, the platform's production had slipped to less than 4,000 barrels per day, and was considered pumped out. Done. Suddenly, in 1990, production soared back to 15,000 barrels a day, and the reserves which had been estimated at 60 million barrels in the '70s, were recalculated at 400 million barrels. Interestingly, the measured geological age of the new oil was quantifiably different than the oil pumped in the '70s. Analysis of seismic recordings revealed the presence of a "deep fault" at the base of the Eugene Island reservoir which was gushing up a river of oil from some deeper and previously unknown source. (8)
A "river of oil" from an unassociated deep source? This does sound promising. But closer examination yields more prosaic descriptions and explanations.
According to David S. Holland, et al., in Search and Discovery, the reservoir is characterized by
1. Structural features dominated by growth faults, salt domes, and salt-related faulting.
2. Thick accumulations of predominantly deltaic deposits of alternating sand and shale.
3. Young reservoirs (less than 2.5 m.y. old) with migrated hydrocarbons whose origins are in deeper, organic-rich marine shales.
4. Rapidly changing stratigraphy, due to deposition and subsequent reworking.
5. Numerous oil and gas fields with stacked reservoirs, long hydrocarbon columns, and high producing rates. (9)
While it is true that the estimated oil reserves of Eugene have increased, the numbers are not extraordinary. The authors note that "From 1978 to 1988, these operations, activities, and natural factors [including better exploration and recovery technology] have increased ultimate recoverable reserves from 225 million bbl to 307 million bbl of hydrocarbon liquids and from 950 bcf to 1.65 tcf of gas." Other estimates now put the estimate of total recoverable oil as high as 400 Mb.
None of this is especially unusual for a North American oil field: most fields report reserve growth over time as a consequence of Securities and Exchange Commission reporting rules that require reserves to be booked yearly according to what portion of the resource is actually able to be extracted with current equipment in place. As more wells are drilled into the same reservoir, the reserves "grow." Then, as they are pumped out, reserves decline and production rates dwindle. No magic there.
Production from Eugene Island had achieved 20,000 barrels per day by 1989; by 1992 it had slipped to 15,000 b/d, but recovered to reach a peak of 30,000 b/d in 1996. Production from the reservoir has dropped steadily since then.
The evidence at Eugene Island suggests the existence of deep source rocks from which the reservoir is indeed very slowly refilling - but geologists working there do not hypothesize a primordial origin for the oil. In "Oil and Gas - 'Renewable Resources'?" Kathy Blanchard of PNL writes, "Recent geochemical research at Woods Hole Oceanographic Institution has demonstrated that the wide range in composition of the oils in different reservoirs of the Eugene Island 330 field can be related to one another and to a deeper source rock of Jurassic-Early Cretaceous age." (10) Her article explains that this kind of migration from nearby source rocks is hardly unique, and discusses it in the context of conventional biotic theory. A technical paper by David S. Holland, et al., "Eugene Island Block 330 Field - U.S.A. Offshore Louisiana," published by AAPG, notes that the Eugene Island oils show
abundant evidence of long-distance vertical migration. Based on a variety of biomarker and gasoline-range maturity indicators, these oils are estimated to have been generated at depths of 4572 to 4877 m (15,000 to 16,000 ft) at vitrinite reflectance maturities of 0.08 to 1.0% and temperatures of 150 to 170C (300 to 340F). Their presence in shallow, thermally immature reservoirs requires significant vertical migration. This is illustrated on Figure 36, which represents a burial and maturation history for the field at the time of petroleum migration, that is, at the end of Trimosina "A" time approximately 500,000 years ago. A plot of the present measured maturity values versus depth is superimposed on the calculated maturity profile for Trimosina "A" time to illustrate the close agreement between measured and predicted maturity profiles. The clear discrepancy between reservoir maturity and oil maturity is striking and suggests that the oil migrated more than 3650 m (12,000 ft) from a deep, possibly upper Miocene, source facies. Petroleum migration along faults is indicated based on the observed temperature and hydrocarbon anomalies at the surface and the distribution of pay in the subsurface. These results are consistent with those of Young et al. (1977), who concluded that most Gulf of Mexico oils originated 2438 to 3350 m (8000 to 11,000 ft) deeper than their reservoirs, from source beds 5 to 9 million years older than the reservoirs. (11)
The claims for the abiotic theory often seem overstated in other ways. J. F. Kenney of Gas Resources Corporations, Houston, Texas, who is one of the very few Western geologists to argue for the abiotic theory, writes, "competent physicists, chemists, chemical engineers and men knowledgeable of thermodynamics have known that natural petroleum does not evolve from biological materials since the last quarter of the 19th century." (12) Reading this sentence, one might assume that only a few isolated troglodyte pseudoscientists would still be living under the outworn and discredited misconception that oil can be formed from biological materials. However, in fact universities and oil companies are staffed with thousands of "competent physicists, chemists, chemical engineers and men [and women!] knowledgeable of thermodynamics" who not only subscribe to the biogenic theory, but use it every day as the basis for successful oil exploration. And laboratory experiments have shown repeatedly that petroleum is in fact produced from organic matter under the conditions to which it is assumed to have been subjected over geological time. The situation is actually the reverse of the one Kenny implies: most geologists assume that the Russian abiotic oil hypothesis, which dates to the era prior to the advent of modern plate tectonics theory, is an anachronism. Tectonic movements are now known to be able to radically reshuffle rock strata, leaving younger sedimentary oil- or gas-bearing rock beneath basement rock, leading in some cases to the appearance that oil has its source in Precambrian crystalline basement, when this is not actually the case.
Geologists trace the source of the carbon in hydrocarbons through analysis of its isotopic balance. Natural carbon is nearly all isotope 12, with 1.11 percent being isotope 13. Organic material, however, usually contains less C-13, because photosynthesis in plants preferentially selects C-12 over C-13. Oil and natural gas typically show a C-12 to C-13 ratio similar to that of the biological materials from which they are assumed to have originated. The C-12 to C-13 ratio is a generally observed property of petroleum and is predicted by the biotic theory; it is not merely an occasional aberration. (13)
In addition, oil typically contains biomarkers - porphyrins, isoprenoids, pristane, phytane, cholestane, terpines, and clorins - which are related to biochemicals such as chlorophyll and hemoglobin. The chemical fingerprint of oil assumed to have been formed from, for example, algae is different from that of oil formed from plankton. Thus geochemists can (and routinely do) use biomarkers to trace oil samples to specific source rocks.
Abiotic theorists hypothesize that oil picks up its chemical biomarkers through contamination from bacteria living deep in the Earth's crust (Gold's "deep, hot biosphere") or from other buried bio-remnants. However, the observed correspondences between biomarkers and source materials are not haphazard, but instead systematic and predictable on the basis of the biotic theory. For example, biomarkers in source rock can be linked with the depositional environment; that is, source rocks with biomarkers characteristic of land plants are found only in terrestrial and shallow marine sediments, while petroleum biomarkers associated with marine organisms are found only in marine sediments.
The Bottom Line
The points discussed above represent a mere sampling of the issues; it would be difficult if not impossible for me to address all of the arguments put forward by the abiotic theorists in a brief essay of this nature. I circulated a draft of this essay on two energy-related email newsgroups and received about a dozen thoughtful comments, one defending the abiotic theory but most of the others critiquing it. About half of the comments were from physicists, geophysicists, or geologists. It quickly became apparent to me that a book-length treatment of the subject is called for.
J. F. Kenney has put forward a succinct and persuasive paper arguing for the abiotic theory (5), but there is no prominently published rebuttal piece that systematically discusses or attempts to refute his assertions. A reader of Kenney's web site might find fault with some of my statements in this essay (for example, as a counter to my description of the depth "window" of oil formation, a reader might refer to Kenneyís discussion of Russian experiments that have shown that oil can be formed at high temperatures and high pressures - conditions similar to those that must exist in the Earthís mantle). Yet among the draft comments I received from scientists were convincing criticisms of Kenney's claims (returning to my example: even if oil were formed in the mantle, as more than one commenter pointed out, abiotic theorists have suggested no plausible means by which it could rise to the depths at which we find it without passing through intermediary regions in which the temperature would be too high and pressure too low for liquid hydrocarbons to survive). Many other assertions made by Kenney and critiqued by the experts are more technical in nature and more difficult to summarize.
So, rather than continuing along these lines, I would prefer now to pull back from a focus on details and again emphasize the bigger picture.
There is no way to conclusively prove that no petroleum is of abiotic origin. Science is an ongoing search for truth, and theories are continually being altered or scrapped as new evidence appears. However, the assertion that all oil is abiotic requires extraordinary support, because it must overcome abundant evidence, already cited, to tie specific oil accumulations to specific biological origins through a chain of well-understood processes that have been demonstrated, in principle, under laboratory conditions.
Now, I like scientific mavericks; I tend to cheer for the underdog. Peak oil is itself a maverick idea, and for the past several years I have been promoting a view that the Wall Street Journal recently described as "crackpot." (14) So I feel a bit unaccustomed and even uncomfortable now to be on the side of the scientific "establishment" in arguing against the abiotic oil theorists. The latter certainly deserve their day in the court of scientific debate.
Perhaps one day there will be general agreement that at least some oil is indeed abiotic. Maybe there are indeed deep methane belts twenty miles below the Earthís surface. But the important question to keep in mind is: What are the practical consequences of this discussion now for the problem of global oil depletion?
I have not personally inspected the oil wells in Saudi Arabia or even those in Texas. But nearly every credible report that I have seen - whether from the industry or from an independent scientist - describes essentially the same reality: discoveries are declining, and have been since the 1960s. Spare production capacity is practically gone. And the old, super-giant oil fields that the world depends upon for the majority of its production are nearing or past their all-time production peaks. Not even the Russian fields cited by the abiotic theorists as evidence for their views are immune: in June the head of Russia's Federal Energy Agency said that production for 2005 is likely to remain flat or even drop, while other officials in that country have said that growth in Russian production cannot be sustained for more than another few years. (15)
What if oil were in fact virtually inexhaustibleówould this be good news? Not in my view. It is my opinion that the discovery of oil was the greatest tragedy (in terms of its long-term consequences) in human history. Finding a limitless supply of oil might forestall nasty price increases and catastrophic withdrawal symptoms, but it would only exacerbate all of the other problems that flow from oil dependency - our use of it to accelerate the extraction of all other resources, the venting of CO2 into the atmosphere, and related problems such as loss of biodiversity. Oil depletion is bad news, but it is no worse than that of oil abundance.
Given the ongoing runup in global petroleum prices, the notion of peak oil hardly needs defending these days. We are seeing the phenomenon unfold before our eyes as one nation after another moves from the column of "oil exporters" to that of "oil importers" (Great Britain made the leap this year). At some point in the very near future the remaining nations in column A will simply be unable to supply all of the nations in column B.
In short, the global energy crisis is coming upon us very quickly, so that more time spent debating highly speculative theories can only distract us from exploring, and applying ourselves to, the practical strategies that might preserve more of nature, culture, and human life under the conditions that are rapidly developing.
1. See New Scientist www.newscientist.com/news/news.jsp?id=ns99996425
4. See Kenneth Deffeyes, Hubbertís Peak, pp. 21-22, 171; Walter Youngquist, Geodestinies, p. 114.
7. www.911-strike.com/pfeiffer.htm (link expired; click on "cached")
9. #20003, 1999, http://www.searchanddiscovery.com/do...015/eugene.htm
12. See footnote 9.
14. "As Prices Soar, Doomsayers Provoke Debate on Oil's Future," 9/21/2004
- Richard Heinberg is the author of Powerdown: Options and Actions for a Post-Carbon World and The Party's Over: Oil, War and the Fate of Industrial Societies; he is a Core Faculty member of New College of California in Santa Rosa. www.museletter.com
|October 21st, 2009||#74|
Join Date: Jun 2009
Gotta have something to worry about. I could not imagine fretting over "running out."
If you want to worry, worry over the looming dictatorship- the one that is already here, actually.
|April 9th, 2012||#75|
Demise of Peak Oil Theory
by David Deming
Peak Oil is the theory that the production history of petroleum follows a symmetrical bell-shaped curve. Once the curve peaks, decline is inevitable. The theory is commonly invoked to justify the development of alternative energy sources that are allegedly renewable and sustainable.
Peak Oil theory was originated by American geologist M. King Hubbert. In 1956 Hubbert predicted that US oil production would peak between 1965 and 1970. When production peaked in 1970, it was interpreted as proof that Hubbert's model was correct and that US oil production had entered a period of inexorable and irreversible decline. Unanswered was the question of whether or not US production had declined simply because it had become cheaper to purchase imported oil.
Peak Oil is a theory based upon assumptions. Like other scientific theories, it is subject to empirical corroboration or falsification. Although Hubbert correctly predicted the timing of peak US oil production, several of his other predictions based on Peak Oil theory were wrong.
Hubbert predicted that the maximum possible US oil production by 2011 would be one billion barrels. But actual production in 2011 was two billion barrels. Hubbert predicted that annual world oil production would peak in the year 2000 at 12.5 billion barrels. It didn't. World oil production in 2011 was 26.5 billion barrels and continues to increase. Hubbert was grossly wrong about natural gas production. In 1956 he predicted that by 2010 US annual gas production would be 4 TCF. But in 2010, US wells produced more than 26 TCF of gas.
The flaw of Peak Oil theory is that it assumes the amount of a resource is a static number determined solely by geological factors. But the size of a exploitable resource also depends upon price and technology. These factors are very difficult to predict.
The US oil industry began in 1859 when Colonel Edwin Drake hired blacksmith Billy Smith to drill a 69-foot-deep well. Subsequent technological advances have opened up resources beyond the limits of our ancestors' imaginations. We can drill offshore in water up to eight-thousand feet deep. We have enhanced recovery techniques, horizontal drilling, and four-dimensional seismic imaging. Oklahoma oilman Harold Hamm is turning North Dakota into Saudi Arabia by utilizing hydraulic fracturing technology. US oil production has reversed its forty-year long decline. By the year 2020, it is anticipated that the US will be the world's top oil producer.
For at least a hundred years, people have repeatedly warned that the world is running out of oil. In 1920, the US Geological Survey estimated that the world contained only 60 billion barrels of recoverable oil. But to date we have produced more than 1000 billion barrels and currently have more than 1500 billion barrels in reserve. World petroleum reserves are at an all-time high. The world is awash in a glut of oil. Conventional oil resources are currently estimated to be in the neighborhood of ten trillion barrels. The resource base is growing faster than production can deplete it.
In addition to conventional oil, the US has huge amounts of unconventional oil resources that remain untouched. The western US alone has 2000 billion barrels of oil in the form of oil shales. At a current consumption rate of 7 billion barrels a year, that's a 286-year supply.
Nine years ago, I predicted that "the age of petroleum has only just begun." I was right. The Peak Oil theorists, the malthusians, and the environmentalists were all wrong. They have been proven wrong, over and over again, for decades. A tabulation of every failed prediction of resource exhaustion would fill a library.
Sustainability is a chimera. No energy source has been, or ever will be, sustainable. In the eleventh century, Europeans anticipated the industrial revolution by transforming their society from dependence on human and animal power to water power. In the eighteenth century, water power was superseded by steam engines fired by burning wood. Coal replaced wood, and oil and gas have now largely supplanted coal. In the far distant future we will probably utilize some type of nuclear power. But for at least the next hundred years, oil will remain our primary energy source because it is abundant, inexpensive, and reliable.
Petroleum is the lifeblood of our industrial economy. The US economy will remain stagnant and depressed until we begin to aggressively develop our native energy resources. As Harold Hamm has said, "we can do this." What's stopping us is not geology, but ignorance and bad public policy.
April 9, 2012
David Deming [send him mail] is associate professor of arts and sciences at the University of Oklahoma. His book, Black & White: Politically Incorrect Essays on Politics, Culture, Science, Religion, Energy and Environment, is available for purchase on Amazon.com.
|August 30th, 2012||#76|
Doug Casey on Peak Oil
Interviewed by Louis James, Editor, International Speculator
L: Doug, in our conversation last week about Syria, we talked about implications for the oil business, and you mentioned Peak Oil. That's a controversial subject to some, and we've had questions about it. Care to comment?
Doug: There shouldn't be any controversy, as the facts are clear – and there wouldn't be any, if so many people weren't so obstinate about misunderstanding plain English. For instance, I was just reading an article the other day, entitled Whatever Happened to Peak Oil?, in which the writer comes across as if not an idiot, then at least intellectually dishonest. He does so first by his reference to an apocalyptic religious prediction, where he implies that those who credit M. King Hubbert's Peak Oil theory are like foolish religious fanatics, as opposed to analysts of a possible geological reality, and second – and more important – by showing a complete failure to grasp the very simple essence of the Peak Oil argument.
L: Which is?
Doug: In essence, that there is a finite amount of conventional light, sweet crude in the earth's crust. That statement may not seem like a cosmic breakthrough, on its face. After all, if you have a 42-gallon barrel of oil and you consume 21 barrels, it's simple arithmetic that 21 barrels remain. On the other hand, wealth is something men create, not something that they simply find. That philosophical fact, however, doesn't really have much to do with Peak Oil theory.
This theory is widely misunderstood, even by economically literate people, oddly enough. Such people rightly point out that the world will basically never run out of anything, as long as the market is free to set prices. Decreased supply increases prices, which simultaneously causes people to economize, and incentivizes new producers and new alternatives to enter the field. That's absolutely true, but irrelevant to Hubbert's point, which was strictly a geological one: The number of conventional deposits of light, sweet crude in the US are finite, and the search for them has been more thorough than anywhere else in the world, and a documented decline in discoveries had to lead to a documented decline in production – of this particular kind of oil.
Peak Oil is a major reason why, in spite of a rapidly cooling global economy, oil prices are still near historic highs, at over $95 a barrel. In part, this is due to so-called "quantitative easing" – i.e., money-printing – but it's also clearly evidence of the essential correctness of Hubbert's theory, which accurately predicted the peaking of light, sweet crude-oil production in the US circa 1970. It was not only technically daring, but occupationally and politically dangerous in the '50s for Hubbert to forecast that the US, and then world production, would go into decline. And he was right.
L: Oil sands were not part of his consideration.
Doug: Right. To my knowledge, he never said anything about oil sands, shale oil, oil from coal, heavy oil from Venezuela, or deep ocean drilling off the coast of Brazil or other places. He did not say, and Peak Oil does not mean, that the world is going to run out of oil. All he said was that the lowest-hanging fruit was picked – the production of that particular kind would go into permanent decline. Technology is constantly pushing both production costs lower and expanding economic supply. But the simple fact that the low-hanging fruit is being depleted at an accelerating rate worldwide is simultaneously pushing costs up. In fact, for many years – especially the '0s and '60s – people discovered a lot more oil than the world produced. But since 1980, the world has produced more oil than people discovered. Petroleum geos believe there are about two trillion barrels of recoverable conventional oil, and we now appear to have produced a bit over half of it.
Unconventional oil supplies of all types could easily be ten times as great as the light, sweet crude supplies we're depleting – but that's simply not relevant to Hubbert's theory, which was a geological statement, not an economic one.
L: There's no real argument on this point, right? US light, sweet crude production did peak, just as he foresaw.
Doug: That's correct. And he also predicted that in about 2005-2010, light, sweet crude production would peak globally – and it has.
A lot of people pooh-pooh Peak Oil saying, quite correctly, that we'll never run out of oil. That's true partly because of the huge amounts of unconventional oil available, partly because of constant improvements in technology, and because of the basic economic arguments I mentioned earlier. But again, these things are irrelevant to Hubbert's point and its documented correctness.
The take-away point from all this is that the cost of oil production has likely found a new floor. Peak Oil doesn't mean we run out of oil – only that the cost of production, which now often runs about $40 per conventional barrel and up to $80 per unconventional barrel, all-in, is never going back down to where it was. Prices can never go back to where they were either, because if they drop – or are forced by law – below the cost of production, there won't be any production.
Even considering the current economic downturn, which is in fact the Greater Depression beginning, the developing world, especially the Chinese and Indians, is going to be using a lot more oil. It's just going to have to come more and more from higher-cost, unconventional sources. It's worth noting that oil consumption in the developed world – North America, Europe, and Japan – is flat and has been for years. The growth in consumption – and there will be growth – is coming from China, India, and the rest of the world, where 80% of the people are.
L: Is there really no chance of ever running out? Even the unconventional stuff must be finite…
Doug: No – or rather, it's an academic point. As a matter of basic science, oil is really a simple chemical. It's just carbon, hydrogen, and oxygen, all of which are common and abundant on our planet. We can make oil in the lab now; and at high-enough prices, it would be economic to make oil products in chemical plants, out of these three basic elements. If we're right about nanotechnology, the cost of synthesizing gasoline and almost any molecules you can think of will drop to trivial levels – with no waste or byproducts.
L: If we ever get cheap, programmable assemblers…
Doug: Even without that, they – in particular Craig Venter, who is also responsible for huge breakthroughs in sequencing the human genome – are already working on algae that make oil. There are lots of technological fixes for this. It simply makes no sense to worry about running out of oil in particular or fuel in general. It's not going to happen.
L: That doesn't stop the Mad Max wannabes from citing Peak Oil as scientific proof that The End is nigh.
Doug: [Chuckles] Yes, there seem to be two schools of thought relating to Hubbert's theory. Both are basically reflections of the psychology of the people in question and have nothing to do with Peak Oil. One group says the world is running out of oil completely – the "Mad Max" group you referenced. The other says Hubbert was wrong, and we'll never run out of oil. Of course, they are right that we'll never run out, but Hubbert was right about conventional light, sweet oil – which is basically what the world has run on for the last century.
L: Investment implications? People wonder if these more-expensive-to-produce, alternative oil supplies are viable, and the answer is…
Doug: Yes. The answer is yes. But even that's no big deal, over the long haul. Oil is the most compact, dense store of easily transportable energy we have, making it ideal for vehicles today. Fifty years from now, however, there will be a dozen cheaper and better technologies.
The chattering classes have an innate and most regrettable tendency to become hysterical over any possible problem – most of them temporary, illusory, artificial, or imaginary. Global warming, overpopulation, immigration, food shortages, nuclear power, drugs, genetically modified organisms – they're all blown up out of all proportion, just like the so-called energy crisis. That's because hysteria leads to calls for political action, and political action feeds power to the state and its minions.
The fact of the matter is that most things are nonproblems... or absolutely would be if the market was allowed to solve them.
L: Sure – just look at how far electric cars have come. Nobody wanted them before, because something like a golf cart is simply not practical for driving the kids to school, bringing home a cord of wood, or driving across the country. Enter the Tesla Roadster – the thing can accelerate faster than my Corvette. If it could go both as far and fast as my 'Vette, I might just buy one. But that design is already several years old, and batteries and electric motors keep getting lighter and more powerful. As they get better, there won't be any point in governments forcing people to buy electric cars – they'll want them because they are better cars. I've already seen free electric-charging stations at rest areas between my house and Vancouver – this could work for me.
Doug: Exactly. Moore's Law applies here too, though maybe at a different rate. As I like to point out, there are more scientists and engineers alive today than during all the rest of history combined – and they are busy doing things.
L: So would you buy stock in Tesla Motors (Nasdaq: TSLA)?
Doug: I might, but I don't know the company well enough. And the stock market doesn't impress me as a bargain, either. Anyway, a great idea doesn't always make for a great company. It's a pioneer, and pioneers often wind up full of arrows. I leave that sort of thing to Alex Daley and the Casey Extraordinary Technology team.
L: Other investment implications?
Doug: Well, as I was just saying, oil prices have probably reached a new plateau, based on the cost of production, which is driven by the Peak Oil factor. Prices of raw materials cannot fall below the cost of production, even with government price controls – not for longer than stockpiles last, anyway.
I think the same argument applies for gold and silver – and many other elements and minerals, by the way.
L: So are you buying oil stocks now, or are you looking for lower prices, given your bearish view of the global economy in the near term?
Doug: As with Alex and the technology stocks and you with mining stocks, when it comes to particular oil companies, I follow whatever Marin Katusa says in our energy letters very carefully.
But I have to say that the oil business is different from mining. Mining is a tough and, in today's world, basically a crappy business. It's unwanted, expensive, high risk, and has a myriad other problems. They can be addressed, but they never go away. At least on technical grounds, oil is a much easier business; you can see what you're usually looking for with 3D seismic surveys and one drill hole can both make your discovery and put it into production. Some of those holes can deliver thousands of barrels of oil per day for years. So, as far as the economics, science, and engineering goes, it's a much better business than mining – but for the same reasons, it's become much more politicized. That makes government risk even greater than mining.
At any rate, my gut sense is that just like the junior mining stocks, junior oil stacks are bouncing around near a bottom. And oil juniors are almost as volatile as junior mining stocks.
L: Well, whether it's in oil, technology, or metals exploration, when you go from having nothing but an idea to having a discovery with measurable value, the results for shareholders can be spectacular. The change in value from nothing to something – whatever that "something" is – can make for three- and four-digit percentage gains in days. That's why we like these "most volatile stocks on earth," as you call them.
Doug: That's right. Speculating on a discovery in any of these fields takes nerves of steel and a true contrarian mindset, but for those who have the discipline, the results can be life-changing.
There are literally thousands of these little venture companies you could bet on. You have to be diligent – ruthless, actually – about narrowing the field, which is what makes our "8 Ps" approach to separating the wheat from the chaff so important.
L: The 8 Ps – my mantra and my marching orders. Okay then, thanks for the clarification on Peak Oil.
Doug: My pleasure. See you next week at our upcoming Carlsbad Summit. I look forward to spending time with many of our readers there.
L: Me too – always fun. And for those who can't make it, we'll both be at this year's New Orleans conference.
Doug: Well, speaking of other gatherings, there are efforts to start new Casey phyles in Thailand and Tennessee. If any of our readers live in those areas and are looking for like minds – or if they live somewhere else and would like to find or start a Casey group, they can find out more by emailing [email protected].
L: Very good. See you soon!
August 30, 2012
Doug Casey (send him mail) is a best-selling author and chairman of Casey Research, LLC., publishers of Casey’s International Speculator.